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General Motors names long-time insider Mark Reuss as its president

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Mark Reuss, General Motors Executive Vice President Global Product Development, speaking last January.

General Motors named long-time insider Mark Reuss as its president, effective immediately.

Reuss formerly led GM's global product group and Cadillac. His duties will now include overseeing GM's quality organization.

GM reported fourth-quarter sales on Thursday that fell more than 2 percent over the the same period last year.

Shares of GM were down more than 1 percent in premarket trading.

GM Cruise and DoorDash are partnering on autonomous food deliveries

Elijah Nouvelage | Reuters
Two self-driving Chevy Bolt EV cars are seen during a media event by Cruise, GM’s autonomous car unit, in San Francisco, California, U.S. November 28, 2017.

Food delivery service DoorDash is partnering with General Motors' self-driving unit Cruise to test autonomous technology for meal and grocery deliveries, the companies said Thursday.

It is the latest step the autonomous driving technology firm is taking toward bringing its technology to market. The program will begin in early 2019 with and will be initially focused on the San Francisco area, the companies said.

“Delivery is a significant opportunity for Cruise as we prepare to commercialize our autonomous vehicle technology and transform transportation,” Cruise CEO Dan Ammann said in a statement. “Partnering with DoorDash will provide us with critical learnings as we further our mission to deliver technology that makes people's lives better and more convenient.”

Automakers are developing new business models for self-driving cars as they perfect the technology. Ford, for example, started autonomous delivery tests with Postmates and Domino's Pizza.

Tesla competitor, Byton’s M-byte, has a dashboard video screen as big as 7 iPads

Source: Paul Eisenstein
The interior of the Byton M-Byte features a 48-inch video screen.

A Chinese startup that's vying for Tesla's customers unveiled Sunday a 48-inch-wide video screen that stretches across the top of the dashboard of the Byton M-byte battery-electric vehicle.

The video screen, the size of seven iPads across, will anchor a business model that focuses as much on selling “content” as cars, CEO Carsten Breitfeld told CNBC.com. The SUV offers an optional 95-kilowatt-hour battery that can travel as far as 325 miles between charges.

The Chinese start-up staged one of the lead-off events for the annual Consumer Electronics Show — now known as CES — in Las Vegas. Fittingly, Byton's hour-long news conference focused on the connected technologies that will be built into its first product, the M-byte sport-utility vehicle set to go into production “before the end of the year,” said Breitfeld. That includes not only the massive screen atop the instrument panel but another that will float atop the steering wheel, allowing a driver to operate virtually all vehicle functions.

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The M-byte will target a variety of established automakers moving into the battery-car space, including Audi, BMW and Mercedes-Benz, as well as Tesla, now the sales leader in the electric vehicle market. At a starting price of $45,000, it will come in at around the same price as the least expensive Tesla Model 3 currently on the market.

The base car will include a 71 kWh lithium-ion battery capable of around 250 miles range. A fully loaded version, Breitfeld added, will push into the $60,000 range will include the longer-range, 95 kWh battery. It will also feature all-wheel-drive, rather than the rear-wheel-drive system in the base model. And it will be offered with optional Level 3 autonomous driving capabilities. That will permit the vehicle to operate largely hands-free on highways, though the driver will need to be ready to take retake control in an emergency.

Both versions will come equipped with the 48-inch screen, the floating touchscreen atop the steering wheel and a third touch-enabled pad atop the center console that can be operated by a passenger. The vehicle will also allow a motorist to operate its various digital functions by voice or by using gestures, similar to technology found in several new BMW models.

Source: Paul Eisenstein
Dr. Carsten Breitfeld,, Byton CEO on stage at CES

The CES event focused primarily on the digital technology going into the new M-byte, an extensive array of features that the company has dubbed “Byton Life,” something meant to “transform those four wheels into the next-generation smart device.” Breitfeld declared. “M-byte could become the most important digital device in your life.”

The system relies on the latest in digital microprocessing technology operating both artificial intelligence and machine learning software, added Daniel Kirchert, Byton's co-founder and president. And it will link to the world through the new 5G wireless network just starting to go into place in the U.S., China and Europe.

Byton has also partnered with Amazon and will integrate the U.S. firm's Alexa voice assistant into the battery-SUV. That will allow passengers to plug in destinations, change audio sources and remotely operate smart home systems – turning on their lights at home while driving home at the end of the day, for example. But Byton hopes to also sell videos, games and other content that can be displayed on screens throughout the vehicle, including twin LCD displays for rear seat occupants.

“Our business model will not just be about selling cars, but using the car as a platform,” Breitfeld said in an impromptu interview following the CES news conference. “In the future, we will make more money selling digital content and shared mobility.”

The CEO believes in one of the big transformations many experts anticipate will sweep through the transportation industry over the next decade. A study released a year ago by the Boston Consulting Group forecast 30 percent of the miles that Americans clock on the road each year will be in self-driving vehicles operated by ride-sharing services. Breitfeld said he thinks that could come closer to 50 percent.

Byton, he added, plans to set up its own ride- and vehicle-sharing operations, rather than just selling its vehicles to existing services like Uber, Lyft or Waymo. The latter, a spin-off of Google, last month launched the world's first commercial self-driving ride-sharing program in Phoenix. Byton isn't the only automaker exploring that option. General Motors has said it plans to launch a similar service this year through its Cruise Automation subsidiary. Volkswagen and Ford have outlined similar plans.

Backed by the Nanjing government, as well as First Auto Works, or FAW, one of China's largest homegrown auto companies, Byton is one of a growing list of Chinese-funded electric vehicle start-ups. It's finalizing work on a plant in Nanjing that will be able to produce up to around 300,000 vehicles annually, Breitfeld told his CES audience. He subsequently told CNBC that the plan is to sell about half of those vehicles in China, and about a third, or 100,000 annually, in the U.S. The rest will go to Europe.

Source: Paul Eisenstein
Concept version of Byton M-Byte, set to be 1st vehicle to go into production in China this year.

The M-byte will be its first model, a move that reflects the growing dominance of SUVs in the global automotive market. Sales are expected to begin in China by the fourth quarter of this year and the company will open its first showroom in Shanghai on Jan. 17. The M-byte is expected to go on sale in the U.S. and Europe in the third quarter of 2020.

The concept version of the electric SUV on display in Las Vegas is about 80 percent accurate when compared to the final production model, said Benoit Jacob, the carmaker's vice president of design and the former head of BMW i, the German automaker's electric sub-brand. The most notable difference will come with the addition of conventional sideview mirrors replacing the camera system on the concept.

That's not unusual, automakers typically try to push the envelope on a prototype, then tame back their production designs. But, “I challenged the team to make the production car even better than the show car,” Jacob said during the news conference.

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Byton unveiled a concept version of its second model, the K-byte, at the Los Angeles Auto Show five weeks ago. The sedan will feature the same electric drivetrain and digital electronics technology as the M-byte. It is set to go into production by 2021, with a third model on tap for two years later. Byton officials would not discuss plans for that product.

The use of such a massive video display generated plenty of buzz at the tech-focused CES, but also raised questions about whether it might distract the driver — something CEO Breitfeld discounted.

For his part, David Trippany, the associate director of supply chain and technology at IHS Markit, said the bigger question is why. “Right now, it doesn't seem like there's a user justification to have so much real estate (devoted to) the screen.”

Byton officials said they designed the M-byte to be “future proof,” anticipating they will find reasons to have that screen covering the entire instrument panel. But Trippany said the future could see very different technologies replace conventional screens. “Everything could go AR (augmented reality)” over the life of the M-byte, making the system obsolete.

Source: Paul Eisenstein
Concept version of Byton M-Byte, set to be 1st vehicle to go into production in China this year.

Born with ‘gasoline in his blood,’ GM’s Reuss adds president to long list of duties

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Mark Reuss, General Motors Executive Vice President Global Product Development, speaking last January.

Mark Reuss, the global head of General Motors' product development operations, will add “president” to his already expansive list of duties — the latest in a series of management tweaks under CEO Mary Barra.

The 55-year-old Reuss – whose father also served as GM president nearly three decades ago – replaces Dan Ammann.

Ammann moved over to the company's autonomous vehicle subsidiary, Cruise Automation, last November. But Reuss will assume only some of Ammann's former duties in a paired down role as president, allowing him to retain his current focus on product.

Saying that Reuss has played a “critical role” at GM in his current assignment, GM Chairman and CEO Barra added, “Mark's global operational experience, deep product knowledge and strong leadership will serve us well as we continue to strengthen our current business, take advantage of growth opportunities and further define the future of personal mobility.”

Gasoline in his veins

Reuss is wont to say he has “gasoline in his blood.” Having trained as an engineer, his duties as product development chief have been as much passion as avocation. It is a job that frequently lets him shed his suit and tie for a helmet and fireproof racing suit while testing new products at the General Motors Proving Grounds in Milford, Michigan, an hour northwest of its corporate headquarters along the Detroit riverfront.

He joined the automaker in 1983 as a student intern. It was a period of massive change under then-Chairman and CEO Jack Smith. In 1990, as the controversial chairman retired, Mark Reuss's father Lloyd was named GM president, but he held that post only two years before being ousted in the first in a series of activist investor-led revolts.

The younger Reuss remained with GM and, over the next two decades served in a broad mix of posts testing his business acumen as well as his engineering skills. That included a run as head of the automaker's long-struggling Australian subsidiary, Holden, which recently shuttered its manufacturing operations.

Big break

Reuss got his big break in 2001 when he was tasked with creating a new performance division where he got the chance to oversee development of a variety of vehicles, including the Chevrolet Corvette, as well as the reborn Chevy Camaro.

While never generating significant volume, those products helped shine GM's star, tarnished by some of the poorly reviewed products it had produced during the 1980s and 1990s, an era when it was sometimes dismissed as “Malaise Motors.”

But things continued to go from bad to worse for the company saddled with debt and facing ever tougher competition from European and Asian imports. By 2010, GM was forced to enter a carefully managed bankruptcy, surviving only with the help of a massive federal bailout. Most of its top management team, starting with then-Chairman and CEO Rick Wagoner, were unceremoniously booted, much as Lloyd Reuss had been nearly two decades earlier. Son Mark was, however, one of the survivors.

Plum assignment

And he landed a plum assignment that would test both the business and product side of his skills as the new head of North American Operations.

By mid-decade, Reuss was seen as a potential contender for CEO. But as Dan Akerson, an industry outsider who joined GM post-bankruptcy, announced his retirement, the job instead went to another top lieutenant. Like Reuss, Mary Barra had also started at GM as a college co-op student and also came from a GM family – though her father was a factory “shop rat.”

For his part, Reuss got a major consolation prize, heading global product development – a job that frequently leds him shed his suit and tie for a helmet and fireproof racing suit. Last June, he was also named head of Cadillac and has been heavily involved in the development of a stream of new vehicles expected to roll out of the luxury brand every six months through 2021.

Too many hats

Under his new assignment as president, Reuss will retain those roles, a decision that analyst Joe Phillippi, head of AutoTrends Consulting, questions. Though Reuss is “very talented,” Phillippi said, “he had too many hats to start with. There should be someone running product development and that's all they do all day.”

Whether Reuss might eventually shed some of his duties remains to be seen, but observers say that GM's upper management ranks appear to be in a bit of a flux. If anything, the company had indicated it wasn't going to name a new president when Ammann moved over to Cruise Automation as CEO of the San Francisco-based autonomous vehicle development company last November.

For those worried that Reuss may find his time spread thin, a GM spokesman told CNBC that the company's new president won't take over all of the duties that had been on Ammann's plate.

Full speed

When the former president was reassigned, CEO Barra took over responsibility for managing both the automaker's global regions, as well as its “captive” finance subsidiary, GM Financial. Chief Financial Officer Dhivya Suryadevara, meanwhile, assumed control over GM's corporate development operations.

Reuss will take on one new role, overseeing GM's quality control operations which, the automaker noted, dovetails well with his product development duties. Long faulted for reliability issues, GM has, in recent years, made rapid gains, particularly with its Buick and Chevrolet brands, according to studies by outside arbiters such as J.D. Power and Associates.

“I am very proud to have spent my entire career at General Motors, and to now take on this new role is truly a great honor,” Reuss said in a statement Thursday. “With our current lineup of outstanding cars, trucks and crossovers around the world, I'm looking forward to keeping our momentum going at full speed.”

GM shares rise after BMO upgrade on self-driving technology

VCG | Getty Images
A Chevrolet Equinox SUV is seen on the production line at SAIC-GM Wuhan Manufacturing Plant on April 7, 2017 in Wuhan, China.

Investors should buy General Motors because its automated car division and restructuring moves will lift the automaker's stock in 2019, BMO Capital Markets said Monday.

Analyst Richard Carlson upgraded GM to outperform from market perform. Carlson also hiked his price target on the stock to $41 a share from $38, representing a 23 percent upside from Friday's close.

Shares of GM rose 1.4 percent Monday.

“We expect a brighter spotlight to be placed on GM Cruise in 2019, leading to a more appropriate value for this business being priced into the shares,” Carlson said in a note to clients. Also, “we believe restructuring efforts will drive better profitability and [free cash flow], as well as improve cyclical resilience.”

GM acquired Cruise in 2016 in an effort to keep up with other companies in the self-driving car race. In November, GM announced that former co-president Dan Ammann would take over as Cruise CEO this month.

“We believe a key catalyst for GM shares in 2019 could be an increased valuation for GM Cruise being priced into the stock,” said Carlson.

Carlson added that GM's restructuring, which includes halting production at several plants and cutting more than 14,000 jobs, should help the stock regain its footing after a dismal 2018. Shares of GM plunged more than 18 percent last year.

“Within the core business, we expect restructuring initiatives to drive higher profit margins and free cash generation, while also improving cyclical resilience, which should also drive a higher multiple,” he said.

Correction: This story has been updated to reflect that GM acquired Cruise.

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Elon Musk wants to keep ex-girlfriend Grimes out of an investor lawsuit over his take-private tweet

Theo Wargo | Getty Images Entertainment | Getty Images
Elon Musk and Grimes attend the Heavenly Bodies: Fashion & The Catholic Imagination Costume Institute Gala at The Metropolitan Museum of Art on May 7, 2018 in New York City.

Elon Musk is fighting to keep his ex-girlfriend from being dragged into an investor lawsuit over the Tesla CEO's now infamous take-private tweet.

Musk's attorney, Dean Kristy, argued in a motion filed Thursday in a U.S. district court that the proposed subpoena of Canadian musician Grimes, who was dating Musk in August when he tweeted that he was considering taking Tesla private at $420 per share, is an effort to “sensationalize these proceedings” rather than a legitimate fact-finding mission.

A group of investors is suing Tesla and Musk related to the tweet. The plaintiffs are also proposing subpoenas of rapper Azealia Banks, who alleged in Instagram posts that Musk was using drugs at the time, and various media outlets that interviewed Banks or Musk, like Business Insider and The New York Times.

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“Plaintiffs did not bother to contact any of the five non-parties it intends to subpoena to find out if they even have any relevant information,” Kristy argues in the motion. “None of the third parties ever worked for Tesla or Mr. Musk, or is alleged to have had any involvement in his tweets or in his evaluation of a potential go-private transaction.”

The Securities and Exchange Commission revealed in its own lawsuit against Musk — settled in September and resulting in $40 million in total fines — that Musk chose his proposed buyout price of $420 because he thought Grimes, whose real name is Claire Elise Boucher, would find it funny.

Banks is a friend of Grimes' and said in Instagram posts that she stayed at Musk's house in the days after he sent the tweet. She later made allegations about his drug use and motivations on Instagram.

“Ms. Boucher and Ms. Banks were in close contact with Mr. Musk before and after the tweet at issue and are believed to be in possession of relevant evidence concerning Mr. Musk's motives,” said Eduard Korsinsky of Levi & Korsinsky, the firm representing the plaintiffs, in a statement to CNBC. “Granting the motion would allow the plaintiffs to preserve this evidence and help provide a fair opportunity to take discovery for all parties.”

Kristy, citing news articles about the incident and rapper, says in the court filing:

She is a “veteran of long and nonsensical beefs [having] feuded with everyone from Sarah Palin to Nick Cannon”; she “remains a Twitter villain even after being banned from the service”; she went on a rant on Instagram “that began as a delirious critique of colonial wealth and racial privilege, [and] became a vaguely eugenicist denigration of Musk as a caveman”; and she “has a history of making bold and sometimes unverified claims,” including against Beyonce, MonetX (a rival) and Russell Crowe. Published reports also indicate that Ms. Banks apparently claims to have offered Twitter's CEO a form of “protection” from ISIS. Despite reports that completely undermine her credibility, plaintiff calls her a “key source of information in this matter” – which if anything underscores how weak plaintiff's case is – based entirely on her claim that she was present in Mr. Musk's home to visit Ms. Boucher from August 10-12 (well after the August 7 tweets) and supposedly observed Mr. Musk, even though he flatly denies ever meeting her.

The plaintiffs are also seeking subpoenas of The New York Times, Business Insider and Gizmodo related to articles the outlets published in the weeks after Musk's tweet.

The case is numbered 3:18-cv-04865-EMC in U.S. District Court for the Northern District of California.

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Why car payments are on the rise as gas prices fall

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12:48 PM ET Fri, 4 Jan 2019 | 01:25

While gas prices have been falling, the cost of monthly car payments keeps climbing.

During the third quarter of 2018, the average new car monthly payment accelerated to $530, with the average used car loan payment at $381. According to Experian Automotive data, both figures are at record highs.

The average car loan is now just under $31,000. However, Experian says 20 percent of borrowers are taking out loans of $50,000 or more.

“If you`ve been out of the market for five or six years, then these numbers can be surprising,” Melinda Zabritski, Experian's Director of Automotive Credit told CNBC's “On the Money” in a recent interview. “And they`re certainly not going to go down.”

The richer price tags haven't yet dissuaded consumers. Despite higher payments, larger vehicles including pickup trucks, SUVs and crossovers remain in high demand. Meanwhile, U.S. auto sales are on track to exceed 17 million vehicles for the fourth consecutive year.

Marco Bertorello | AFP | Getty Images
A Jeep logo of Italian-American Fiat Chrysler company is pictured on a car at a car dealer on January 13, 2017 in Turin, northern Italy. The United States on January 12, 2017 charged Fiat Chrysler with using software on its trucks to evade emissions standards on about 104,000 vehicles, an accusation the company immediately denied.

Zabritski told CNBC that those taking out car loans “don`t represent a huge portion of the market, but they are definitely the area we see the most growth. These loan amounts that are over $50,000 and even over $70,000.”

It raises the question of exactly who is borrowing $50,000 or more to buy a new vehicle. According to CNBC's Phil LeBeau, it's ” those with the best credit rating. The super prime and prime credit rating customers. That is one of the fastest growing segments of the auto loan market.”

On the other end, he explained, “those with the poorest credit records, they are pulling back, not borrowing as much.” Loans to that segment of the market have hit their lowest in 11 years, he added.

Meanwhile, Americans seem to be signing up for longer terms to repay those larger vehicle loans.

“The average is just under 70 months, and it's not uncommon for people to take out six-and-a-half and seven-year loans,” LeBeau said.

On the Money airs on CNBC Saturdays at 5:30 am ET, or check listings for air times in local markets.

Tesla to break ground on Shanghai factory

Beck Diefenbach | Reuters
Elon Musk, CEO of Tesla

Tesla was set Monday to hold the groundbreaking ceremony for its first non-U.S. factory in Shanghai, according to CEO Elon Musk.

“Looking forward to breaking ground on the Tesla Shanghai Gigafactory today!” Musk tweeted Monday morning Beijing time.

He added in subsequent tweets that the factory will produce Model 3 and Model Y vehicles for the Greater China region, and that the plan is to “finish initial construction this summer, start Model 3 production end of year & reach high volume production next year.”

Musk's electric car maker acquired the land on the outskirts of the city for about $140 million in October. The luxury vehicle brand is popular in China but faces rising competition from local electric automakers such as Nio.

Producing vehicles in China would reduce costs from tariffs and ocean transport for Tesla. In an Oct. 2 report, the American company said it is operating at a 55 percent to 60 percent cost disadvantage for those reasons and because it cannot access the same cash incentives as local Chinese manufacturers.

Tesla's new factory is expected to begin partial production in the second half of this year, according to a government report. The company has set up official accounts on popular Chinese messaging and social media platforms WeChat and Weibo, which list more than 30 openings for positions at the Shanghai factory.

Tesla opens up Model 3 configuration to left-hand drive European countries

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The electric vehicle manufacturer Tesla has announced that some customers in left-hand drive European countries can now configure and buy its Model 3 car.

The U.S. firm announced the change via its Twitter handle:

The cheapest Model 3 option in Germany is priced at 60,000 euros ($68,000.)

Deliveries in right-hand drive markets, such as the United Kingdom, are set to start in the second half of 2019. U.K. customers can already reserve a Model 3 but cannot yet configure the specifications.

Earlier on Friday, Tesla also opened its Model 3 configurator for the Chinese market, offering customers to choose between the long range all-wheel drive and the Performance version.

“We're excited to bring Model 3 to Europe and China early next year, given that the market for midsize premium sedans in those regions is even larger than in North America,” Musk said during an earnings call in October 2018.

The cost of a Tesla Model 3 Performance car will now set back a Chinese customer around 560,000 RMB ($81,000). This reflects a discount of about $25,000 after Beijing suspended the extra 25 percent tariff on cars and parts imported from the U.S.

The cheaper mid-range Model remains unavailable to configure for either Europe or China.

Tesla is currently building a factory 3 in Shanghai which is expected to produce battery packs and electric vehicles at some point this year.

China annual auto sales fall for first time in about two decades with more pain on the way

Fred Dufour | AFP | Getty Images
This picture taken on November 22, 2018 shows vehicles at a Hongqi car dealer in Beijing.

Auto sales in China fell 3 percent in 2018 — their first decline in about two decades and a mild introduction to even more pain coming for automakers doing business in Asia this year, according to China auto consulting firm ZoZoGo.

The slowdown is especially painful for U.S. automakers operating in China, which dwarfs the U.S. as the world's largest car market. Automakers sold roughly 28 million automobiles in China in 2018, compared with about 17 million in the U.S. — the second-largest auto market.

A combination of trade tensions and consumer jitters have stalled sales in a country that has historically been a considerable source of growth for the industry.

“Look for the market to fall another 5 percent in 2019 because consumer confidence remains shaky,” said Michael Dunne, the CEO of ZoZoGo, which advises automakers doing business in China. Dunne is the former president of GM Indonesia. “There's simply too much uncertainty amidst a slowing economy, job security worries and then there is the big cloud of angst about US-China trade tensions. ”

U.S. automaker General Motors has said it is doing well in the country, despite what it calls a challenging business environment. Ford has been less fortunate, due in part to automaker's failure to churn out product fast enough in the highly competitive Chinese market.

U.S. stocks fell sharply on Thursday following a dire quarterly warning from Apple and the release of weaker-than-expected manufacturing data. The iPhone maker blamed a slowing Chinese economy for the shortfall, intensifying fears that the global economy may be slowing down.